[Premium] Three Charts For The Week Ahead

Last week we focused on Nifty 500/ Nifty Small Cap Top 10 and Nifty 50 Top 10, & Vaneck Vectors Agribusiness ETF.

Let's move into this week's topics.

1.  The first chart we're looking at is Nifty 50 relative to India's 10-year Bond yield as well as Nifty 50 relative to Gold.

The 10-year bond yield had been climbing for some time, pushing the bond prices lower. This action had a positive on the stock market as bonds and stocks tend to move in opposite directions. We're now looking at the relative strength between the Nifty 50 and the 10-year yield., both of which have been moving sideways off late. The blue line seems to be holding on to the support that has been in place since 2021. As long as that continues, the stocks are expected to perform better than the yields.

Coming to the orange line, Nifty 50 is bouncing off of support as well. Gold has been going nowhere but is also considered a more defensive asset. It seems like Nifty50 is outperforming in both cases at present.

The market, regardless, is still messy, you can see that from the sideways move in the two ratio lines as well. We're observing this for any early signals of a trend resumption or a trend reversal. It will be interesting to see how the price reacts at these levels.

2. The second chart we're looking at is the Financial Services sector. The sector has been moving sideways for a while now but is also very close to its risk management levels near 17,450.

We're keeping an eye on this chart to see how the price reacts at these levels going forward. For the most part, Financials have been range-bound with no clear trend direction. Will that continue, will we see the financials take a back seat while other sectors take the lead? It is possible. But we're still waiting on a confirmation on that front.

3. The third chart we're looking at is Aluminum. Trends have been far clearer in commodities rather than stocks and this is just another example. Aluminum has been taking the lead again among the base metals and has been moving higher consistently. For a while there, we saw this metal lagging a little but it seems like the baton is back in the hands of Aluminum.

The recent move above the level of 255 triggers a fresh bullish perspective. We are bullish above the risk management level of 255 with a target near 307. If Aluminum gets going, we may see the other metals follow its lead.

In our view, these charts will help set the tone for this week and provide us with information on how we should approach the market in the coming weeks.

Also, make sure to check out our other weekly post, "Trade Of The Week."

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team